In order to understand this, we need first to differentiate what are the innovations that happen in the construction industry. There are two type major of innovation which is the incremental innovation and the systemic innovation. Incremental innovation can be defined as those innovations that reinforce the existing product or process and provide a measurable impact on productivity.
And on the other hand, we have systemic innovation where productivity for individual components can increase while overall productivity may increase, decline, or remain unchanged. Systemic innovations also refer to innovations that reinforce the existing product but necessitate a change in the process that requires multiple firms to change their practice. Systemic innovations typically enable significant increases in overall productivity over the long term. But these may create switching or start-up costs for some participants and reduce or eliminate the role of others.
From the paper we can see that there are several factors that affected the successes of systemic innovations to be implemented in a company. Listed below are the factors that should be looked into when systemic innovations are the case:
1. Organizational Variety
Most of the time, the parties involved from project to project is different even though the main company of handling the project is the same. This is just one of the unique characteristics of construction industry. The sub-contractor will change based on the type of project that is done by the main contractor. This will diffuse the parties of the project and when this happen a recreation of the team is needed. The rate of social reconstruction refers to the rate at which groups are required to form and reform into a cohesive unit from time to time. If the group’s constituents change from one project to the next, the rate of social reconstruction is considered high.
Organizational variety is high if the main contractor shows a tendency to use a different set of subcontractors for each trade classification from project to project. A long-term relationship with a particular set of subcontractors across projects would constitute a low organizational variety.
2. Degree of Interdependence
As tasks become more interdependent, the rate of diffusion for a systemic innovation will decrease. The least interdependent form is termed pooled interdependence to describe activities in which work does not flow between units. Sequentially interdependent activities are defined as those in which the output of one group is the input of another. Reciprocal interdependence is the most interdependent classification. It describes work in which the output of two groups must be negotiated to address sub-goal conflict.
Typically we expect the building industry to exhibit a high degree of interdependence as differing trade labor groups depend on the work output of others because the input of their own work is a non-linear process.
3. Boundary Strength
Construction project is full of specialists such as plumber, electrician and others. The more rigid the boundary that separates the impacted trades for a given systemic innovation, the more the rate of diffusion will decrease. The rigidity of these boundaries arises from the existence of separate distribution channels, different labor training requirements, jurisdictions of labor unions, scope of services of specialty subcontractors and path dependence.
4. Span
Innovation will not only affect one trade. It will affect other trades in the project as well. The span of the innovation need to be identified, so that steps can be taken to control the span. This can be done by integrating the trade labor groups into the innovating organization. When this is carried out, the systemic innovation can happen without bringing a lot problem to the parties involved in the project.
In order to make it possible for the systemic innovation to produce a great result, the project manager has a very vital roles in ensuring that the following aspects is given attention in handling the project.
1. Reduce organizational variety in their selection of specialist contractors.
If the systemic innovation impacts the process of multiple specialists on the project, project managers should choose one contractor from each specialist group and work with them on several projects. Over time, as inter-organizational routines are able to form, project managers can then begin to introduce new contractors to the bidding shortlist for each specialist firm type. However, project managers must handle this process carefully so as not to lose the productivity gains the firm has already achieved in adopting the systemic innovation.
2. Monitor degree of interdependence of the work on the project.
Project managers must know where interdependencies lay in the project in order to understand how a systemic innovation can be adopted over the course of multiple projects. If interdependence is significant, project managers must pay careful attention to managing the other constructs identified in this research. If interdependence is not significant, its impact on diffusion will be less.
3. Reduce boundary strength between specialists impacted by the innovation.
For the innovation to work well, the environment for the project should be built based on mutual trust. This will allow for the parties involved in the project to work well with each other. This can be done by having meetings and discussion between the parties impacted from the innovation.
4. Monitor the span of the systemic innovation.
Innovation need to be monitored so that how much impacts do this systemic innovation can be calculated and use to the benefit of the company which at the end will bring a lot of profits to the company. The wider the span of the innovation, the harder it will be for the project manager to control productivity of the works of his project. This happens a lot in a high specialist projects. The project manager should try to integrate those specialist works so that the span of systemic innovation can be decreased.
Posted by:
AHMAD FIRDAUS BIN ZAMRI (2008261138)
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